Subject: Re: stock options to be counted as expenses ?
From: Fielder George Dowding (fgdowding@iceworm-enterprises.net)
Date: Wed Sep 18 2002 - 22:10:02 AKDT
Greetings all. This is somewhat off topic, and it is somewhat
complicated. At base is the question, "How does one accurately
report the profit or loss of a corporation that uses stock options
to compensate its (all, some, a few) employees?" Go to the Bill
Parish site and read what he has to say about the situation. As for
me, a sometime accountant, bookkeeper, and preparer of various tax
and information reports required by the IRS and state governments, I
know there is something wrong with the accounting method if employee
compensation is not expensed in the period in which it is paid.
As Mr. Parish points out, by not expensing compensation in the form
of stock options in the period in which they are transfered to the
employee, the profit is over stated. Thus, investors are getting
wrong signals as to the profitability of the corporation. Of course,
like pyramid schemes, the guy in first makes money, but at some
point, the house of cards comes crashing down.
Well, enough for now from me. Cheerio! fgd
On Wed, 18 Sep 2002 18:09:24 -0800
Newnham <newnham@gci.net> wrote:
>
> I am a bit lost, what does this mean for investors? is it good or
> bad? sorry for being empty headed.
> ----- Original Message -----
> From: "Stanley Long" <slong@customcpu.com>
> To: "AKLUG" <aklug@aklug.org>
> Sent: Wednesday, September 18, 2002 12:23 PM
> Subject: stock options to be counted as expenses ?
>
>
> >
> > The Straits Times
> > Conference Board backs call to treat options as expenses - SEPT
> > 18, 2002
> > http://straitstimes.asia1.com.sg/money/story/0,1870,143955,00.html?
> > Yesterday's recommendations were not unanimous. Mr Volcker said
> > options should be phased out entirely as an element of
> > executive compensation, while
> > Intel's Mr Grove said he remains opposed to treating options as
> > expenses on
> > quarterly statements.
> >
> > - New rules might help stock market -
> > Bill Parish's comments in the Portland (Oregon) Insight.
> > http://www.portlandtribune.com/archview.cgi?id=13111
> > "Surprisingly, most of these investment losses are concentrated
> > in fewer than
> > 10 companies, the biggest being Microsoft Corp."
> >
> >
> > Ancient Background Information:
> > http://www.billparish.com/msftfraudfacts.html
snip
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This archive was generated by hypermail 2a23 : Wed Sep 18 2002 - 22:53:11 AKDT